Consider the following data on new customers for AJ Auto Ins

Consider the following data on new customers for AJ Auto Insurance, specifically the information of the risk level of the customer and the number of tickets they have had in the last year.

0

1

2 or more

Total

Low Risk

56

22

8

86

Medium Risk

18

40

12

70

High Risk

11

13

20

44

Total

85

75

40

200

If you choose a customer at random, then find the probability that the customer is

a. low risk.
b. low risk and had two or more tickets in the last year.
c. medium risk, given that the customer had zero tickets in the last year. (Points : 18)            

Solution

a)

P( low risk ) = 86 / 220 = 0.3909

b)

P( low risk and 2 or more ) = 8 /200 = 0.04

c)

P( medium risk given that customer had 0 tickets ) = 70 / 85 = 0.8235